Canada adds sterling to foreign currency reserves

OTTAWA, March 3 (Reuters) - Canada said on Monday it will
start including sterling-denominated assets in its foreign
currency reserves to improve liquidity and better prepare the
country against potential shocks.

The country's official reserves currently include U.S.
dollars, yen and euros.

The finance ministry and the central bank have been
assessing the possibility of including additional currencies in
the Exchange Fund Account, the main repository of the
international reserves.

"The addition of pound sterling assets to the Exchange Fund
Account will diversify the foreign currency composition of
Canada's foreign reserves and improve the liquidity of the
portfolio," Finance Minister Jim Flaherty said in a statement.

The foreign reserves exist to help protect the value of the
Canadian dollar and provide the government with foreign currency
liquidity.

Canada's international reserves totaled $72.778 billion in
January, of which $40.41 billion was in U.S. dollars.